The retailers regard Sam Walton as the God of Retailing. He has written rules of retailing and rewritten them for the continuous growth. In 1962, Sam Walton founded his company with the three guiding principles that is regarded as the fundamental principles of success. These fundamental principles are relevant to retailer’s business across geography:
Respect the Individual
Our people make the difference – is a reality at Wal-Mart. The company believes that at Wal-Mart the groups of dedicated, hard-working, ordinary people coherently being teamed up, accomplish extraordinary things.
Service to the Customers
Customers are welcomed as messengers of Pluto – The Greek God of wealth and prosperity – at Wal-Mart. It is the continuous effort on the part of the earnest Wal-Mart’s employees to provide the best customer service at the lowest price. At Wal-Mart employee believes that they are nothing without customers and they make sure customer’s hard-earned money stretch further by offering quality merchandise at the lowest price and with the best customer service possible.
Strive for Excellence
Sam Walton believed in striving for excellence before it became fashionable. No wonder Wal-Mart is growing continuously in a large volume and can offers high quality products for low price, which is deserved by the customers. At Wal-Mart employees try to find innovative ways to push boundaries and constantly improve and innovate. They know that Sam Walton is never satisfied with the fact that prices are as low as they could be or that the products’ quality at Wal-Mart is as high as customers deserved.
These three fundamental principles has not only fueled the growth of the Wal-Mart but also help them innovate the way retailers do business. In my views if any retailers want to grow and make big in India or global landscape need to follow the basics of rule. I have seen many Indian retailers trying their hands with technology for success instead of sticking with the fundamentals. Probably they need to understand that technology is one of the elements of the fundamental principles not the mantra of growth.
Retailing in India a Three Dimensional Matrixes
Retail has always been an alluring business proposition and the corporate in recent times has shown keen interest in Indian retailing. The size of India's retail trade is estimated at $330* billion and growing at five per cent annually, according to KSA Technopak, retail advisory which closely tracks the trade. The size of Indian retail is not only attracting domestic players but also attracting international players to India.
The Indian retail scenario is booming and Indian retailers are doing well across the board. Current profits in the organised retail trade are good and the future seems even more alluring. There is evidence that the average urban consumer is saving less today than he did a few years ago and importantly, spending his income on a wider array of goods than earlier. Moreover, the increase in the income level, ever growing double income group, is helping retail grow as consumers is willing pay premium for the newer and better brands. Having discussed this I must mention that there is other segment which is still highly price sensitive and is always looking out for the bargain. There is yet another segment who is daily wages earners. These sets of people buy their grocery based on their requirements, daily.
Retailing in India is developing on three dimensional matrixes where retailers operate as a local, regional and global player. Irrespective of the format and size there is scope for growth for each set of players which widely depend on the needs of the market. Having said this I believe that the Indian retail is not offering equal opportunity to players in the market be it tradition retailers, modern retailers or the international players. As per the rule, foreign retailers cannot yet start operations in their name in India. However, with Minister for Commerce and Industry Kamal Nath announcing that foreign investment would soon be allowed in retailing is a big savior. The traditional trade is finding it difficult to survive in the race of modern retailing. And the domestic modern retailers are facing their own set of problems. It is always difficult to manage and establish equilibrium in the three dimensional plane – the plane in which Indian retail operating.
* The Indian retail market, which is the fifth largest retail destination globally, according to industry estimates is estimated to grow from the US$ 330 billion in 2007 to US$ 427 billion by 2010 and US$ 637 billion by
The Indian retail scenario is booming and Indian retailers are doing well across the board. Current profits in the organised retail trade are good and the future seems even more alluring. There is evidence that the average urban consumer is saving less today than he did a few years ago and importantly, spending his income on a wider array of goods than earlier. Moreover, the increase in the income level, ever growing double income group, is helping retail grow as consumers is willing pay premium for the newer and better brands. Having discussed this I must mention that there is other segment which is still highly price sensitive and is always looking out for the bargain. There is yet another segment who is daily wages earners. These sets of people buy their grocery based on their requirements, daily.
Retailing in India is developing on three dimensional matrixes where retailers operate as a local, regional and global player. Irrespective of the format and size there is scope for growth for each set of players which widely depend on the needs of the market. Having said this I believe that the Indian retail is not offering equal opportunity to players in the market be it tradition retailers, modern retailers or the international players. As per the rule, foreign retailers cannot yet start operations in their name in India. However, with Minister for Commerce and Industry Kamal Nath announcing that foreign investment would soon be allowed in retailing is a big savior. The traditional trade is finding it difficult to survive in the race of modern retailing. And the domestic modern retailers are facing their own set of problems. It is always difficult to manage and establish equilibrium in the three dimensional plane – the plane in which Indian retail operating.
* The Indian retail market, which is the fifth largest retail destination globally, according to industry estimates is estimated to grow from the US$ 330 billion in 2007 to US$ 427 billion by 2010 and US$ 637 billion by
Reliance Big Entertainment Acquires Majority Stake in Willow
The company in news is Willow.TV. It is the world’s leading portal for live Internet streaming of all Cricket events worldwide, and has been providing live streaming video of every major cricket series since 2003. It is a paid site with a subscriber base of over a million registered users, primarily in the US, Canada, Australia and Europe. It provides subscribers with an unparalleled viewing experience with enhancements such as live interactive scorecards and high bandwidth video streams as well as mobile and IM offerings
Willow.TV, last year, streamed all major cricket events live, including the iconic Indian Premier League, as well as all Australian, South African and English international matches. The Willow.TV gain maximum visibility in India when it telecasted the Indian Premier League.
Reliance Big Entertainment, a ADAG company, which is on buying spree, has acquired a majority stake in the US-based cricket webcasting portal - Willow TV. According to the report The Anil Ambani company will invest Rs 300 crore in the portal over the next two years. The amount also includes the acquisition price of the portal.
Reliance Big Entertainment has been aggressively strengthening its position in the entertainment and media space and has been building value across the value chain. The acquisition will strengthen the presence of Reliance Big Entertainment in new media.
Willow.TV, last year, streamed all major cricket events live, including the iconic Indian Premier League, as well as all Australian, South African and English international matches. The Willow.TV gain maximum visibility in India when it telecasted the Indian Premier League.
Reliance Big Entertainment, a ADAG company, which is on buying spree, has acquired a majority stake in the US-based cricket webcasting portal - Willow TV. According to the report The Anil Ambani company will invest Rs 300 crore in the portal over the next two years. The amount also includes the acquisition price of the portal.
Reliance Big Entertainment has been aggressively strengthening its position in the entertainment and media space and has been building value across the value chain. The acquisition will strengthen the presence of Reliance Big Entertainment in new media.
Nazara Technologies to Launch Eklavya,and Yudhistra in Mobile Game
Nazara Technologies is a leading mobile entertainment company focused on the 100 million plus mobile subscriber base in India. The company specialise in localized content that is relevant in India. They have developeed a range of branded and original mobile content that is highly relevant to the culturally diverse consumer base in the country.
Nazara Technologies specialises in high-end 3D graphics, fast multiplayer services. The company has aggressive plans to develop games, and a multiplayer platform to cater to the growing demand. They also have plans to launch cross platform gaming that integrates with Internet and DTH.
Eklavya, The Great Yudhistra soon on iPhone
The mobile gaming company Nazara Technologies is in talks with Apple Computers, maker of iPhone, and its two Indian retailers Airtel and Vodafone Essar to develop a couple of mythology-based games which would be available in the next 4-6 months. The dedicated team of professionals is working on the mythological games such as Eklavya and The Great Yudhistra for iPhones.
Once Nazara Technologies launch the game for the iPhone subscribers the user can doenload the game for retailer sites. The cost of each download would be between INR 30-50 for the subscribers.
Nazara Technologies specialises in high-end 3D graphics, fast multiplayer services. The company has aggressive plans to develop games, and a multiplayer platform to cater to the growing demand. They also have plans to launch cross platform gaming that integrates with Internet and DTH.
Eklavya, The Great Yudhistra soon on iPhone
The mobile gaming company Nazara Technologies is in talks with Apple Computers, maker of iPhone, and its two Indian retailers Airtel and Vodafone Essar to develop a couple of mythology-based games which would be available in the next 4-6 months. The dedicated team of professionals is working on the mythological games such as Eklavya and The Great Yudhistra for iPhones.
Once Nazara Technologies launch the game for the iPhone subscribers the user can doenload the game for retailer sites. The cost of each download would be between INR 30-50 for the subscribers.
Special Economy Zone in India – Lessons from China
In the late 1970s, the Indian and Chinese economies were comparable. The Chinese economy in the 1980s and 1990s cruised ahead of India, and today it finds itself at the top in all sectors against India except in software and knowledge-based products. Special Economy Zone is one of the backbones of the growth of the Chinese economy.
The journey of the Special Economy Zone in India started in year 2000 when M Maran, then Commerce Minister, made a tour to the southern provinces of China and realized the importance of SEZ. On returning from the visit, he incorporated the SEZ into the Exim Policy of India and after five year, Special Economic Zones Act 2005 was introduced and in 2006 SEZ Rules was formulated. The formation of the Special Economic Zones Act was not the first initiative of its kind by Indian government. India was one of the first in Asia to recognize the effectiveness of the Export Processing Zone model in promoting exports, with Asia’s first EPZ set up in Kandla in 1965. The experiment with the Export Processing Zone did not do wonder with the Indian economy.
The government, economists, and entrepreneurs jointly studied the Chinese SEZ model. After through analysis of the Chinese SEZ model, they decided to start the SEZs in strategic locations close to port cities and economic centers.
Lessons from China’s SEZs
In 1979, China started four SEZs and after ten long years the fifth one was set up in 1988. The Chinese government analyse the trends of the first four SEZs and based on that they started the fifth SEZ.
The SEZs in China are located on the coastline near Hong Kong and Taiwan which are major economic centers in the region. A large chunk of the FDI was contributed by the non-resident Chinese from Hong Kong and Taiwan, who invested in labor intensive industries. The size of the SEZs has been an important factor in the success of China’s reforms process. Government of China has gone a step forward and declared the entire region or province as a SEZ. In china, cities along the sea coast, including Shanghai, were opened up for foreign investments and given a status comparable to SEZs. Moreover, the hire and fire policy has attracted foreign investors to invest in China’s SEZs. The flexible labor policy of China was the biggest attraction for the foreign investors.
India Go Forward
In current market scenario when the global manufacturing bases are shifting from the developed countries to the developing countries. The countries like India and China hold good future, primarily due to cheap factor prices and proximity to new markets. In the emerged scenario, the Indian SEZ can easily attract FDI in manufacturing provided they offer hassle-free environment for the investors and all necessary fiscal incentives. Indian SEZ can do wonders the way china had done in past. The Indian SEZ have to remember that the Chinese SEZ were large in size, attracted FDI from the nonresident Chinese, government offered attractive incentives. The Chinese government promoted SEZ with flexible labor laws, liberal customs procedures and decentralization of power to the local authorities.
The journey of the Special Economy Zone in India started in year 2000 when M Maran, then Commerce Minister, made a tour to the southern provinces of China and realized the importance of SEZ. On returning from the visit, he incorporated the SEZ into the Exim Policy of India and after five year, Special Economic Zones Act 2005 was introduced and in 2006 SEZ Rules was formulated. The formation of the Special Economic Zones Act was not the first initiative of its kind by Indian government. India was one of the first in Asia to recognize the effectiveness of the Export Processing Zone model in promoting exports, with Asia’s first EPZ set up in Kandla in 1965. The experiment with the Export Processing Zone did not do wonder with the Indian economy.
The government, economists, and entrepreneurs jointly studied the Chinese SEZ model. After through analysis of the Chinese SEZ model, they decided to start the SEZs in strategic locations close to port cities and economic centers.
Lessons from China’s SEZs
In 1979, China started four SEZs and after ten long years the fifth one was set up in 1988. The Chinese government analyse the trends of the first four SEZs and based on that they started the fifth SEZ.
The SEZs in China are located on the coastline near Hong Kong and Taiwan which are major economic centers in the region. A large chunk of the FDI was contributed by the non-resident Chinese from Hong Kong and Taiwan, who invested in labor intensive industries. The size of the SEZs has been an important factor in the success of China’s reforms process. Government of China has gone a step forward and declared the entire region or province as a SEZ. In china, cities along the sea coast, including Shanghai, were opened up for foreign investments and given a status comparable to SEZs. Moreover, the hire and fire policy has attracted foreign investors to invest in China’s SEZs. The flexible labor policy of China was the biggest attraction for the foreign investors.
India Go Forward
In current market scenario when the global manufacturing bases are shifting from the developed countries to the developing countries. The countries like India and China hold good future, primarily due to cheap factor prices and proximity to new markets. In the emerged scenario, the Indian SEZ can easily attract FDI in manufacturing provided they offer hassle-free environment for the investors and all necessary fiscal incentives. Indian SEZ can do wonders the way china had done in past. The Indian SEZ have to remember that the Chinese SEZ were large in size, attracted FDI from the nonresident Chinese, government offered attractive incentives. The Chinese government promoted SEZ with flexible labor laws, liberal customs procedures and decentralization of power to the local authorities.
Special Economic Zone in India
History of SEZ
In 1947 when India got independence at Puerto Rico industrialist and government was busy setting up world first industrial park. Ireland and Taiwan followed Puerto Rico in sixties and in eighties China bring the SEZ to the global map with its largest SEZ at the metropolis of Shenzhen.
India was one of the first in Asia to recognize the effectiveness of the Export Processing Zone model in promoting exports, with Asia’s first EPZ set up in Kandla in 1965. In 2000, after thirty-five years, Murlisone Maran, then Commerce Minister, made a tour to the southern provinces of China and realized the importance of SEZ. On returning from the visit, he incorporated the SEZ into the Exim Policy of India and after five year, Special Economic Zones Act 2005 was introduced and in 2006 SEZ Rules was formulated.
The main objectives of the SEZ Act include – generation of additional economic activity , promotion of exports of goods and services, promotion of investment from domestic and foreign sources, creation of employment opportunities, and development of infrastructure facilities.
Government initiative for SEZ
Indian government to instill confidence in investors and signal their commitment towards a stable SEZ worked on the Special Economic Zones Act. In May, 2005 the Special Economic Zones Act was passed by Parliament, which received Presidential assent on the 23rd of June, 2005.
The Special Economic Zones Act 2005, after extensive consultations, came into effect on 10th February, 2006. The Act offered drastic simplification of procedures on matters relating to central as well as state governments. The main objectives of the SEZ Act include generation of additional economic activity, promotion of exports of goods and services, promotion of investment from domestic and foreign sources, creation of employment opportunities, and development of infrastructure facilities. It is expected that the Special Economic Zones Act will trigger a large flow of foreign and domestic investment. Government offered various incentives to the companies in SEZ:
•Duty free import/domestic procurement of goods for development, operation and maintenance of SEZ units
•100% Income Tax exemption on export income for SEZ units under Section 10AA of the Income Tax Act for first 5 years, 50% for next 5 years thereafter and 50% of the ploughed back export profit for next 5 years.
•Exemption from minimum alternate tax under section 115JB of the Income Tax Act.
•External commercial borrowing by SEZ units upto US $ 500 million in a year without any maturity restriction through recognized banking channels.
•Exemption from Central Sales Tax.
•Exemption from Service Tax.
•Single window clearance for Central and State level approvals.
•Exemption from State sales tax and other levies as extended by the respective State Governments.
The Special Economic Zones Act also offered major incentives and facilities to SEZ developers which include:
•Exemption from customs/excise duties for development of SEZs for authorized operations approved by the BOA.
•Income Tax exemption on income derived from the business of development of the SEZ in a block of 10 years in 15 years under Section 80-IAB of the Income Tax Act.
•Exemption from minimum alternate tax under Section 115 JB of the Income Tax Act.
•Exemption from dividend distribution tax under Section 115O of the Income Tax Act.
•Exemption from Central Sales Tax (CST).
•Exemption from Service Tax (Section 7, 26 and Second Schedule of the SEZ Act).
Apart from the above mentioned incentives the companies in SEZ require no license for import made under SEZ units. In the case of losses they are allowed to carry forward losses. The other advantages are
•No license required for import made under SEZ units.
•Duty free import or domestic procurement of goods for setting up of the SEZ units.
•Goods imported/procured locally are duty free and could be utilized over the approval period of 5 years.
•The SEZ unit is permitted to realize and repatriate to India the full export value of goods or software within a period of twelve months from the date of export.
•“Write-off” of unrealized export bills is permitted up to an annual limit of 5% of their average annual realization.
•No routine examination by Customs officials of export and import cargo.
•Setting up Off-shore Banking Units (OBU) allowed in SEZs.
•OBU's allowed 100% income tax exemption on profit earned for three years and 50 % for next two years.
•Enhanced limit of Rs. 2.40 crores per annum allowed for managerial remuneration.
•Since SEZ units are considered as ‘public utility services’, no strikes would be allowed in such companies without giving the employer 6 weeks prior notice in addition to the other conditions mentioned in the Industrial Disputes Act, 1947.
The advantages of the SEZ are evident from the investment, employment, exports and infrastructural developments additionally generated. In midst of all these advantages the SEZ also has its own set of disadvantages, which include
•Revenue losses because of the various tax exemptions and incentives.
•Many traders are interested in SEZ, so that they can acquire at cheap rates and create a land bank for themselves.
•The number of units applying for setting up EOU's is not commensurate to the number of applications for setting up SEZ's leading to a belief that this project may not match up to expectations.
The economist strongly believe that the benefits derived from the investments and additional economic activity in the SEZ and the employment generated thus will outweigh the tax exemptions and the losses on account of land acquisition.
In 1947 when India got independence at Puerto Rico industrialist and government was busy setting up world first industrial park. Ireland and Taiwan followed Puerto Rico in sixties and in eighties China bring the SEZ to the global map with its largest SEZ at the metropolis of Shenzhen.
India was one of the first in Asia to recognize the effectiveness of the Export Processing Zone model in promoting exports, with Asia’s first EPZ set up in Kandla in 1965. In 2000, after thirty-five years, Murlisone Maran, then Commerce Minister, made a tour to the southern provinces of China and realized the importance of SEZ. On returning from the visit, he incorporated the SEZ into the Exim Policy of India and after five year, Special Economic Zones Act 2005 was introduced and in 2006 SEZ Rules was formulated.
The main objectives of the SEZ Act include – generation of additional economic activity , promotion of exports of goods and services, promotion of investment from domestic and foreign sources, creation of employment opportunities, and development of infrastructure facilities.
Government initiative for SEZ
Indian government to instill confidence in investors and signal their commitment towards a stable SEZ worked on the Special Economic Zones Act. In May, 2005 the Special Economic Zones Act was passed by Parliament, which received Presidential assent on the 23rd of June, 2005.
The Special Economic Zones Act 2005, after extensive consultations, came into effect on 10th February, 2006. The Act offered drastic simplification of procedures on matters relating to central as well as state governments. The main objectives of the SEZ Act include generation of additional economic activity, promotion of exports of goods and services, promotion of investment from domestic and foreign sources, creation of employment opportunities, and development of infrastructure facilities. It is expected that the Special Economic Zones Act will trigger a large flow of foreign and domestic investment. Government offered various incentives to the companies in SEZ:
•Duty free import/domestic procurement of goods for development, operation and maintenance of SEZ units
•100% Income Tax exemption on export income for SEZ units under Section 10AA of the Income Tax Act for first 5 years, 50% for next 5 years thereafter and 50% of the ploughed back export profit for next 5 years.
•Exemption from minimum alternate tax under section 115JB of the Income Tax Act.
•External commercial borrowing by SEZ units upto US $ 500 million in a year without any maturity restriction through recognized banking channels.
•Exemption from Central Sales Tax.
•Exemption from Service Tax.
•Single window clearance for Central and State level approvals.
•Exemption from State sales tax and other levies as extended by the respective State Governments.
The Special Economic Zones Act also offered major incentives and facilities to SEZ developers which include:
•Exemption from customs/excise duties for development of SEZs for authorized operations approved by the BOA.
•Income Tax exemption on income derived from the business of development of the SEZ in a block of 10 years in 15 years under Section 80-IAB of the Income Tax Act.
•Exemption from minimum alternate tax under Section 115 JB of the Income Tax Act.
•Exemption from dividend distribution tax under Section 115O of the Income Tax Act.
•Exemption from Central Sales Tax (CST).
•Exemption from Service Tax (Section 7, 26 and Second Schedule of the SEZ Act).
Apart from the above mentioned incentives the companies in SEZ require no license for import made under SEZ units. In the case of losses they are allowed to carry forward losses. The other advantages are
•No license required for import made under SEZ units.
•Duty free import or domestic procurement of goods for setting up of the SEZ units.
•Goods imported/procured locally are duty free and could be utilized over the approval period of 5 years.
•The SEZ unit is permitted to realize and repatriate to India the full export value of goods or software within a period of twelve months from the date of export.
•“Write-off” of unrealized export bills is permitted up to an annual limit of 5% of their average annual realization.
•No routine examination by Customs officials of export and import cargo.
•Setting up Off-shore Banking Units (OBU) allowed in SEZs.
•OBU's allowed 100% income tax exemption on profit earned for three years and 50 % for next two years.
•Enhanced limit of Rs. 2.40 crores per annum allowed for managerial remuneration.
•Since SEZ units are considered as ‘public utility services’, no strikes would be allowed in such companies without giving the employer 6 weeks prior notice in addition to the other conditions mentioned in the Industrial Disputes Act, 1947.
The advantages of the SEZ are evident from the investment, employment, exports and infrastructural developments additionally generated. In midst of all these advantages the SEZ also has its own set of disadvantages, which include
•Revenue losses because of the various tax exemptions and incentives.
•Many traders are interested in SEZ, so that they can acquire at cheap rates and create a land bank for themselves.
•The number of units applying for setting up EOU's is not commensurate to the number of applications for setting up SEZ's leading to a belief that this project may not match up to expectations.
The economist strongly believe that the benefits derived from the investments and additional economic activity in the SEZ and the employment generated thus will outweigh the tax exemptions and the losses on account of land acquisition.
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